xlsx files open with new name

I have an odd problem occurring on my laptop. I'm running WinXP SP3 and Office 2007.

When I open an xlsx file, it's opened as a new file. For instance, I have a file on my desktop called 'book.xlsx'. When I double click this file to open it, it's opened as 'book1.xls'. If I make any changes, it acts like it's a completely new file when I try to save it. Saving as 'book.xlsx' asks to overwrite. It doesn't happen with xls files or any other office 2007 extension.

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Although Jacob Bernoulli (1654-1705) has been credited as the creator of "Binomial Distribution Table", Gottfried Leibniz (1646-1716) did his dissertation on the subject in 1666; Leibniz you may recall is the co-inventor of "Calculus" and beat Isaac…